Dr. Edward
W. Younkins is a Professor of Accountancy and Business
Administration at Wheeling Jesuit University in West Virginia. He
is the author of Capitalism and Commerce.

"WHO IS HENRY M. GALT": A REVIEW OF GARET
GARRETT'S THE DRIVER

by Edward W. Younkins

The Driver (1922) is a prime example of the literature of
achievement. The author, Garet Garrett (1878-1954), had the ability
to make economic, financial, and management processes come alive in
novel form. Not only is The Driver a novel of high finance
and Wall Street methods, it also paints a portrait of an efficacious
and visionary man who uses reason to focus his enthusiasm on reality
in his efforts to attain his goals.

As a financial journalist
for several prominent papers, Garrett knew Wall Street well and
wrote a series of novels portraying the morality of capitalism,
production, and business activities. For many years, he exhibited
his talents as a political commentator and essayist at the
Saturday Evening Post. In fact, The Driver first appeared
as a six-part series in the Saturday Evening Post.

The novel captures the essence of the progressive era of America that
spanned the late 19th and early 20th centuries. During this period,
industrialization and a wave of immigrants altered the fabric of
American life which became increasingly urban, industrial, and
specialized. This was a time of great social and economic development.
During this formative period, America's agrarian society of farmers
and small producers was transformed into an urban society in which the
corporation became the dominant form of business organization. Steel
and oil were in great demand and national transportation and
communications networks were being developed. This was a period of
seemingly boundless expansion that presented unprecedented
opportunities to entrepreneurs and speculators. Wall Street was
beginning to develop and railroads boomed as trains moved products
from the resource-rich West to the East.

This was also a period of
instability characterized by periods of boom and bust and the fact
that not all citizens shared in the new wealth and optimism. Mark
Twain called this period the "Gilded Age"  a period that was
glittering on the surface but that was tarnished and corrupt
underneath. This age saw the rise of populist reformers who blamed
greedy Robber Barons and speculators for society's ills. Many people
in society, especially those in government, were anti-business and
anti-Wall Street and called for government intervention to cure the
problems that had developed during the great industrial growth spurt
of the late 19th century.

Unlimited prosperity and human happiness

After the Panic of 1893,
America suffered a severe economic depression resulting in mass
unemployment. In response to this economic adversity, in the winter of
1893-94, Jacob S. Coxey, an American social reformer and populist
leader from Massillon, Ohio, proposed a recovery program that included
Congressional enactment of a large increase in the amount of legal
tender in circulation that could be spent on public works thus
providing jobs for the unemployed. In other words, he advocated public
works financed by fiat money. Coxey formed an organization called the
Commonwealth of Christ and assembled an army of unemployed men. On
Easter Sunday, March 25, 1894, he led an army of 100 unemployed men on
a march scheduled to arrive in Washington, D.C. on May 1 for a huge
demonstration petitioning Congress for measures to alleviate distress
and unemployment. Coxey's Army wanted to demand from Congress a law by
which unlimited prosperity and human happiness might be established on
earth. They thought that people would work and be prosperous if
Congress created an abundant amount of fiat or "democratic" money.
Coxey's Army grew to only 500 participants who arrived in D.C. where
the leaders were arrested and the army was quickly disbanded.

According to Garrett,
naοve trust is the power of words to command reality is found in all
mass delusions. For example, in 1894, populists pressured Congress to
enact a bi-metallic system of money by declaring that gold and silver
are equal in dollar value and that gold and silver dollars be
interchangeable. The problem was that gold remained more valuable to
people prompting them to hoard gold or to sell it in Europe. As a
result, the Treasury's gold fund was continually depleted.

The nameless first-person
narrator of The Driver is a reporter for an undisclosed
newspaper who follows Coxey's Army to Washington, D.C. This
correspondent-narrator is selected by a group of 43 reporters to send
accurate reports regarding the march of Coxey's Army to Mr. Valentine,
President of the Great Midwestern Railroad headquartered in New York
City. The narrator, who acquires the nickname of "Coxey," gains a
position as personal secretary to Valentine and meets Henry M. Galt, a
Wall Street speculator who has an intense interest in the Great
Midwestern. After meeting Galt, "Coxey" becomes Galt's friend and a
constant presence in Galt's business and personal life. It is through
the eyes of this reporter-narrator that readers understand the career,
struggles, and evolution of a little-known Wall Street speculator and
risk-taker to king of Wall Street and to a potential economic dictator
of the United States. Unfortunately, Garrett also includes a
disappointing, confusing, frustrating, and mostly irrelevant subplot
dealing with Galt's family.

Galt, an eccentric and
brilliant broker, floor trader, and member of the stock
exchange believes in the future of the Great Midwestern
Railroad, continually buys stock in it with his and his
family's money, and becomes one of its largest stockholders.
He knows more about the Great Midwestern than anyone else
including its President, Mr. Valentine, a weak, inefficient,
and non-confident man who runs the business into bankruptcy.

Although Valentine is
appointed as receiver, Galt intelligently and diligently
studies records, data, and statistics to develop a strategic
plan of reorganization to save and rebuild the Great
Midwestern. His creative plan encompassed finance, physical
resources, and business policy, reflected his great
knowledge of the railroad and its properties, and was
embraced by the Board. He thereby exhibited how invaluable
he was to the railroad.

"Once something happened, it becomes an
irreversible fact and every other fact in the universe must adjust
itself to that one fact. In other words, a man must use his unique
attribute, reason, to apprehend the natural order by which he is
bound."

Galt knew that after the
reorganization he would be one of ten men in the boardroom
and that "everything else follows from that." Not only does
he become a member of the Board of Directors he also manages
to get himself elected as its Chairman using his influence
with several men who were indebted to him. The Great
Midwestern Railroad Company thus lives on and progresses
under the new name of the Great Midwestern Railway Company.
In time, Galt would overthrow Valentine thereby also
becoming the company's President.

Committed to reality and action

Galt overcame obstacles
by driving ahead with aggressive insensitivity and fanatic
intentness, all the time keeping focused on his goal and
taking practical rational steps in its pursuit. He harshly
dismissed employees who hindered the company and rewarded
employees who advanced it. Carefully calculating his every
action, Galt continually persisted to improve the railroad.
He made huge investments in assets including new tracks,
engines, cars, rails, land, road improvements, and
equipment. He carefully considered the relative merits of
different kinds of equipment, operational problems, the cost
of capital, upkeep, and so on. Galt employed an innovative
profile map identifying bad grades. As a consequence, he
developed better routes by cutting steep grades and by
reducing or eliminating curves. Galt ultimately rebuilds the
railroad from end to end. Through his intelligence, hard
work, and determination, he was able to take a failing
company and revitalize it. One of his key moves was to issue
new securities using the proceeds to invest in the
reconstruction of the Great Midwestern. He later used the
company's profits to buy large interests in other companies.
Through the reinvestment of profits he was able to make his
railroad stronger.

Unlike many other
businessmen, Galt did not begin by asking how his company
can be made to earn a certain rate of profit. Rather, he
asked how the Great Midwestern can be built into the
greatest transportation company in the world. He knew that
if that were done, then the profit would take care of
itself.

Galt was committed to
reality and action and the need to transform ideas into
concrete form. He worked on the premise that once something
happened, it becomes an irreversible fact and that every
other fact in the universe must adjust itself to that one
fact. In other words, a man must use his unique attribute,
reason, to apprehend the natural order by which he is bound.
It was evident that Galt had confidence in his capacity to
deal with the world through the implementation of
appropriate and efficacious ideas and measures.

Galt invested all of
himself, as well as all of his savings, into the Great
Midwestern. He had a tremendous work ethic as evidenced by
his passionate expenditure of time and mental and physical
effort in the unwavering pursuit of his dream of building a
great railroad. Galt had the power to move men's minds,
persuade them, command them, and reward them. He had the
power to imagine what could be, to bring his vision into
reality, and to create wealth. He was seen as an elemental
force. Regarding Galt, the novel's narrator says, "The sight
of inspired craftsmanship is irresistible to men."

After rebuilding the
Great Midwestern, Galt led the company into other ventures
such as buying controlling interests in other railroads as
well as in investment and insurance companies. Two such
companies were the Orient and Pacific Railroad and Security
Life Insurance Company. As a result, he and his family
became rich.

Galt wins, creates his
empire, and makes enemies in the process. He was satiric and
had the power to irritate people. In addition, he had no use
for public opinion or government. He was contemptuous of
politics. Galt knew nothing about society's views and did
not care about them. He had no time for the press and did
not engage in public relations. Galt greatly underestimated
the force of public opinion. As a result, his family faces
social ostracism, Wall Street turns against him, and he is
attacked under the antitrust act that had been enacted as
special interest regulation to protect less-efficient firms.

Galt's family gains some
acceptance and Galt is able to take actions to reverse the
decline in the price of the Great Midwestern's stock. An
alarmed Congress resolves to investigate Galt and his
business dealings and summons him to appear before a
Committee of the House. Of course, as expected by now by the
reader, Galt defends himself magnificently. He tells the
Committee that he is a farmer who farms the country,
fertilizes it with money, sows it with more money, reaps
profits, and sows the profits back again.

Galt was then asked by
the Committee if he, as chairman of the finance committee of
Security Life Insurance Company, recommended that securities
of the Great Midwestern be purchased. He answered yes and
explained that he did not know of a better investment. He
was then asked about the disgruntled minority shareholders
of the Orient and Pacific who were upset with the Great
Midwestern for exercising the power of a majority
shareholder. Galt simply explained that he was willing to
buy them out at any time.

A well-respected hero

Galt went on to explain
that he built his empire by buying a bankrupt company and
equipment, property, and stock in other companies when they
were selling at low prices. He bought things that nobody
else wanted, saw what others did not see, worked hard,
managed well, and created great wealth. At this point he
announces that in the next year he would be spending
$500,000,000 (an amount equal to half the national debt at
that time) for double tracking, grade reductions, new
equipment, and larger terminals. Galt's testimony turns
public opinion overwhelmingly in his favor.

Galt suffers a stroke and
collapses after his ordeal with the committee. His health
deteriorates and he becomes bed-ridden. Still, his mind was
clear and he continued to build for the future. He even had
his maps and charts drawn on the ceiling so that he could
see them. His dream for a pan-American railroad connecting
the North and South American continents survived him in the
form of an idea. Galt dies a well-respected hero.

It is interesting to note
that the character of Henry M. Galt was modeled on 19th
century railroad czar and turnaround specialist, Edward H.
Harriman (1848-1909). Harriman had bought a seat on the New
York Stock Exchange at age 22. By 1883, he sat on the board
of the Illinois Central and initiated its huge expansion
program. In 1898 he took over and rescued the Union Pacific,
a property in receivership and near collapse, and shortly
thereafter purchased the Southern Pacific and Central
Pacific and saved the Erie. It was Harriman who established
standards for locomotives, cars, bridges, structures,
signals, and so on.

Although The Driver
is flawed by its sketchy characterization and its
bewildering and extraneous subplot involving Galt's family,
it is still to be recommended for the portrait it paints of
a hard working, visionary, passionate, loyal, and competent
businessman and for the sense of the "drive of the age" that
it conveys. It is certainly not in the same class as
Atlas Shrugged but what is? It is a good book and a
quick read and I recommend it to you, if you can find it. It
is a shame that it is not still in print.

* May 2008: Good news! Ad Publishing, a
small publishing company based in Denmark, has just
published a completely new version of The Driver. The
book is available on
Amazon.ca,
Amazon.com, and all good online booksellers.